Annual Report 2012

Tailor made Credit

profile The Crédit Agricole Group is the market leader in France in Universal Customer-Focused Banking and one of the largest banks in Europe. As the leading financial partner of the French economy and a major European player, the Crédit Agricole Group supports its customers’ projects in France and around the world across the full spectrum of retail banking businesses and related specialised businesses: insurance, asset management, leasing and factoring, consumer finance, corporate and investment banking. Underpinned by firm cooperative and mutual foundations, 150,000 employees and the 29,000 directors of its Local and Regional Banks, the Crédit Agricole Group is a responsible and responsive bank serving 51 million customers, 6.9 million mutual shareholders and 1.2 million shareholders. In its efforts to support the economy, Crédit Agricole also stands out through its dynamic and innovative social and environmental responsibility policy. The Group features in the top 3 of Novethic’s rankings concerning corporate social responsibility and responsible reporting by Europe’s 31 largest banks and insurance companies. www.credit-agricole.com

150,000

51 

million

clients worldwide

employees

€10.6  

billion

Gross operating income

€71 

billion€

Shareholders’equity - Group share

€31 

billion€

Revenues

11.8 

%*

Core Tier One Ratio

* pro forma post completion of Emporiki disposal

The Group’s organisation

crédit agricole S.A.’s share ownership

6.9 million mutual shareholders underpin Crédit Agricole’s cooperative organisational structure. They own the capital of the 2,512 Local Banks in the form of mutual shares and they designate their representatives each year. 29,000 directors carry their expectations. The Local Banks own the majority of the Regional Banks’ share capital. The 39 Regional Banks are cooperative Regional Banks that offer their customers a comprehensive range of products and services. The discussion body for the Regional Banks is the Fédération Nationale du Crédit Agricole, where the Group’s main orientations are decided. Crédit Agricole S.A. owns around 25% of share capital in the Regional Banks (excl. the Regional Bank of Corsica). It coordinates, in relation with its specialist subsidiaries the various business lines’ strategies in France and abroad.

56.3 

%

of share capital held by the 39 Regional Banks via holding company SAS Rue La Boétie.

43.4 

%

of share capital held by: 01

Institutional investors: 27.9%

02

Individual shareholders: 11.1%

03

Employees via employee mutual funds: 4.4%

0.3 

%

treasury shares

A Universal Customer-Focused Bank The Credit Agricole Group consists of Crédit Agricole S.A. along with all of the Regional and Local Banks, and together they are developing the Universal Customer-Focused Banking model. This model relies on synergies realised between retail banks and associated specialised business lines.

Specialised business lines

Savings management Market-leading positions in France and Europe

• No. 1 in factoring in France • A leader in lease financing in France • A key player in consumer finance

• No. 1 in bancassurance in France • No. 2 in asset management in Europe • A key player in private banking in Europe

Retail Banking The market leader in France and a key player in Europe, with almost 11,300 branches servicing 32 million customers 39 Crédit Agricole Regional Banks Cooperative companies and fully-pledged banks with strong local roots, the Crédit Agricole Regional Banks offer a full range of banking and financial products and services to individual customers, farmers, professionals, businesses, and public authorities.

LCL LCL is a retail banking network with a strong presence in urban areas across France, with four main business lines: retail banking for individual customers, retail banking for professionals, private banking and corporate banking.

International retail banking

Corporate and investment banking An international network in the main countries of Europe, the Americas and Asia • Financing activities • Investment banking • Debt optimisation and distribution • Capital markets

Crédit Agricole is implementing its Universal Customer-Focused Banking model internationally and mainly in Europe, in its key Mediterranean countries of operation.

Other specialised subsidiaries • Crédit Agricole Immobilier • Crédit Agricole Capital Investissement & Finance • Uni-éditions • Crédit Agricole Cards & Payments

Key figures (at year-end 2012)

10,404 employees

Present in

Outstanding loans

773.2 billion

Net banking income

72,908 million

2/3outside of business generated France

23 countries

Standard & Poor’s

A-1 Short term A Long term

FitchRatings

F1+ Short term A+ Long term

Major consumer credit provider in Europe, Crédit Agricole Consumer Finance is well-positioned on all distribution channels, including direct sales, point-ofsale financing, partnerships and brokerage. Subsidiary of Crédit Agricole S.A., Crédit Agricole Consumer Finance has multi-channel expertise enabling it to offer a wide range of financing and insurance solutions in all consumer credit business lines. Reflecting the important economic and social role of consumer credit, Crédit Agricole Consumer Finance is committed to responsible relations with its partners, customers and employees. Its strategy focuses on enhancing customer satisfaction, innovation and operational efficiency.

CRÉDIT AGRICOLE CONSUMER FINANCE 01 Profile 02 Interview with Chairman, Bruno de Laage 03 Interview with Chief Executive Officer, Philippe Dumont 04 Corporate governance 06 Our presence Adapting in a constrained environment 10 The new face of consumer credit in Europe 11 New consumer expectations 12 E  -commerce and M-commerce: widespread use of distance sales 14 Crédit Agricole Consumer Finance achieves its objectives 15 An ambitious Transformation plan 16 Reflection of adapting to a restricted environment

A CONSUMER CREDIT MULTI-SPECIALIST 20 A wide range of products and services 21 Car financing: financial partner of major manufacturers 22 Financial partner of major retailers 24 Excellence serving Crédit Agricole Group retail banking 25 Providing retailers with point-of-sale financing 27 Serving customers 29 Brokerage: a year of consolidation 30 Insurance, needed diversification A COMMITTED PLAYER 34 Actively preparing for change 36 Committed to safeguarding the environment 37 Active in corporate citizenship

Reinventing the business model 40 Restoring sustainable competitiveness 44 Business transformation 45 Reinventing the business

02

Interview with

Bruno de Laage Chairman of the Board of Directors of Crédit Agricole Consumer Finance, Deputy Chief Executive Officer of Crédit Agricole S.A.

Adapting the Group to the new environment “2012 was a watershed for Crédit Agricole Group.”

What is Crédit Agricole Group’s current economic and financial environment? The financial market crisis triggered an economic slowdown that is still affecting household consumption and business investment. The economic recession and fiscal pressure on households is impacting purchasing power. And the banking industry is still tackling major regulatory and financial constraints. We have stepped up preparations in line with the accelerated Basel 3 implementation schedule, while new banking legislation is underway.

How did the Group adapt to the unfavourable climate in 2012? 2012 was a year of transformation and refocusing for the Crédit Agricole Group. We implemented a number of structural changes to adapt to the new financial and regulatory environment, including divesting the Greek subsidiary Emporiki and refocusing in Southern European assets. The adjustment plan presented in September 2011 was successfully achieved, exceeding equity optimisation and deleveraging targets. Group financing

requirements were reduced by €68 billion and risk-weighted assets by €57 billion. Several cost-cutting schemes strengthened operational efficiency, and will enable us to deliver sustainable financial performance. Alongside the adjustment plan in the corporate banking and consumer credit business lines, we launched the MUST plan to cut IT, purchasing and real estate costs by €650 million across Crédit Agricole S.A.

What is the outlook for 2013? Crédit Agricole S.A. has undertaken vast changes to adapt to the new regulatory and financial environment. We have laid the foundations for building the future by controlling debt, reducing risk and making organic growth a priority. Crédit Agricole S.A. will improve its solvency in 2013 without increasing capital, by continuing to rigorously manage assets. In Autumn 2013, we will implement a new medium-term plan, setting a new direction, after these turbulent years. The plan will fix Crédit Agricole S.A.’s objectives in line with the Group’s tenyear plan. There will be a dual strategy: to consolidate business around universal

customer-focused banking, and to further develop the specialised business lines.

What are the Group’s expectations for the consumer credit business? We have to congratulate Crédit Agricole Consumer Finance’s teams for successfully achieving the changes and adaptation required of them. We now need to strengthen synergies with other Group entities, to enhance added value and profitability further, and to continue developing Crédit Agricole Consumer Finance’s self-financing capacity.

03 Crédit Agricole Consumer Finance Annual Report 2012

Interview with

Philippe Dumont Chief Executive Officer of Crédit Agricole Consumer Finance

A successful business transformation in 2012 “The transformation of Crédit Agricole Consumer Finance is underway. We are on track to achieve our goals.”

How did Crédit Agricole Consumer Finance fare in 2012? It was a complex year for the business and action-packed for our teams. In December 2011, we launched an adjustment plan to rapidly deal with the liquidity crisis in France and worldwide, and adapt structurally to Basel 3 requirements, which meant reducing refinancing from the Group by €8 billion. We had achieved the plan objectives by the end of 2012. They included reducing outstanding loans by downsizing business, disposing of doubtful debt portfolios and further diversifying refinancing sources. Despite the deep structural changes in the landscape, we won several victories in 2012: we reduced overall risk (excluding Italy), maintained our margins, and increased market share in China, Scandinavia and Germany. Finally, we launched Crédit Agricole Consumer Finance’s Transformation plan in France: ISEO. As we had promised, we limited the social impact of the plan significantly.

What are the next steps in the business transformation? We have already achieved the first steps of the transformation, including the employee

consultation phase. We are now in the midst of practical implementation, with the separation of Crédit Agricole Consumer Finance Group’s business from the activities of the entity in France. It will enable us to pursue the three goals of our new business model more effectively: innovation, customer satisfaction and operational efficiency. The challenge is to differentiate our business and recover our competitive edge sustainably, while remaining customer-focused.

Given the sluggish economic environment, what is the outlook for 2013? 2013 will be another challenging year, with a contraction in consumer credit business in the first few months. The economic outlook remains complex and lacklustre, while regulatory constraints are intensifying with the new Hamon law and plans to establish a consumer credit database. That is why Crédit Agricole Consumer Finance had to undertake the business transformation early, to ensure we keep up with requirements in the continuously changing environment.

What are Crédit Agricole Consumer Finance’s strategic goals? We are now in a position to develop our business model to make it more balanced and sustainable, by focusing on innovation, customer satisfaction and operational efficiency. Crédit Agricole Consumer Finance is now more autonomous in terms of refinancing and has improved operating efficiency, both of which enable us to contribute more to Crédit Agricole Group’s retail banking business. We were actively involved in drafting the Group’s mediumterm plan and are working to update our Moving Forward Together corporate project. We have three key objectives: successfully implement our new organisation, regain profitability and improve value creation for the Crédit Agricole Group. I am fully confident that our teams are capable of achieving these goals.

04

Corporate Governance Crédit Agricole Consumer Finance is a wholly-owned subsidiary of Crédit Agricole S.A.

Board of Directors at 31 December 2012 Chairman Director

Directors

Bruno de Laage,

Jean Bouysset,

Gérard Cazals,

Henri Le Bihan,

François Mace,

Deputy Chief Executive Officer Crédit Agricole S.A., Head of Retail Banking Activities in France, Specialised Financial Services and Payment and Transaction Systems

Former Executive Crédit Agricole S.A.

Chief Executive Officer CACI

Chairman CRCA Toulouse 31

Chief Executive Officer CRCA Nord de France

Vincent Delatte,

Chairman CRCA ChampagneBourgogne

Laurent Paillassot, Deputy Chief Executive Officer LCL

Marc Deschamps, Chief Executive Officer CRCA Centre France

Benoît Albert, Deputy Chief Executive Officer LCL

Daniel Epron,

Chairman CRCA Normandie

05 Crédit Agricole Consumer Finance Annual Report 2012

Group Executive Committee (left to right) Kees Droppert, CEO of Crédit Agricole Consumer Finance Nederland BV Guillaume Lesage, Deputy CEO, Organisation, Operations, Finances and Systems Group Christophe Grave, Deputy CEO, General Secretary and Credit Group Véronique Goutelle, Head of Human Resources Group

Philippe Dumont, Chief Executive Officer Group Sylvie Robin-Romet, Deputy CEO, Distribution and Marketing France Alain Breuils, Deputy CEO, Communication & Development Group Jan W. Wagner, CEO of CreditPlus Bank (Germany) Bernard Manuelli, Heaf of International and Automotive Partnerships

Amir Djourabtchi, Head of the other Business Units (not on photograph)

Heads of business units at 30 April 2013

Alain Breuils, Agos Ducato (Italy)

Ingebjørg Brown, Finaref Nordic (Finland, Norway, Sweden)

Søren Kargaard, Dan Aktiv (Denmark)

Ludek Keltycka, Credium (Czech Republic and Slovakia)

Gilbert Ranoux, GAC-Sofinco AFC Co.Ltd (China)

Jan W. Wagner, CreditPlus Bank (Germany)

Alain Bulbulyan, Credicom Consumer Finance (Greece)

João Miguel Leandro, Credibom (Portugal)

Kees Droppert, Gian Luca de Crédit Agricole Consumer Ficchy, FGA Capital Finance Nederland BV (Netherlands)

Laïla Mamou, Wafasalaf (Morocco)

Philippe Maury, Forso Nordic (Denmark, Finland, Norway, Sweden)

06

Our presence (at year-end 2012) United Kingdom e2,385 million of outstanding loans FGA Capital

SWEDEN e59 million of outstanding loans Forso Nordic Finaref Nordic

NORWAY

e75 million

of outstanding loans Forso Nordic Finaref Nordic

IRELAND FGA Capital

POLAND

e298 million

of outstanding loans FGA Capital

BELGIUM e136 million of outstanding loans FGA Capital FRANCE

e27,965 million of outstanding loans CA Consumer Finance France FGA Capital SPAIN

e546 million

of outstanding loans FGA Capital

PORTUGAL e1,405 million of outstanding loans Credibom FGA Capital MOROCCO

SWITZERLAND e426 million of outstanding loans FGA Capital

e25,092 million

of outstanding loans Wafasalaf

(at year-end 2012 )

AUSTRIA e194 million of outstanding loans FGA Capital ITALY

e2,137 million

Key figures by business unit or entity

HUNGARY e3 million of outstanding loans Credigen

NETHERLANDS e3,773 million of outstanding loans CA Consumer Finance Nederland BV FGA Capital

of outstanding loans Agos Ducato FGA Capital

Crédit Agricole Consumer Finance Nederland BV Location: Netherlands Shareholding structure: 100% CA Consumer Finance e3,561 million outstanding loans 339 employeess

Credibom Location: Portugal Shareholding structure: 100% CA Consumer Finance e1,199 million outstanding loans 343 employees

Crédit Agricole Consumer Finance France Location: France e26,806 million outstanding loans 3,734 employees

CreditPlus Bank Location: Germany Shareholding structure: 100% CA Consumer Finance e2,296 million outstanding loans 450 employees

Credicom Consumer Finance Location: Greece Shareholding structure: 100% CA Consumer Finance e551 million outstanding loans 264 employees

Agos Ducato Location: Italy Shareholding structure: 61% CA Consumer Finance, 39% Banco Popolare e19,343 million outstanding loans 2,095 employees

Wafasalaf Location: Morocco Shareholding structure: 49% CA Consumer Finance, 51% Attijariwafa bank e2,137 million outstanding loans 570 employees

Credium Locations: Czech Republic, Slovakia Shareholding structure: 100% CA Consumer Finance e445 million outstanding loans 168 employees

07 Crédit Agricole Consumer Finance Annual Report 2012

FINLAND

e115 million

of outstanding loans Forso Nordic Finaref Nordic DENMARK

e1,532 million

of outstanding loans Dan Aktiv FGA Capital Forso Nordic GERMANY

e5,146 million

of outstanding loans CreditPlus Bank FGA Capital

CZECH REPUBLIC e383 million of outstanding loans Credium

SLOVAKIA

e62 million

of outstanding loans Credium

CHINA

GREECE e655 million of outstanding loans Credicom Consumer Finance FGA Capital

e886 million of outstanding loans GAC-Sofinco Automotive Finance Co.Ltd

SAUDI ARABIA e17 million of outstanding loans Sofinco Saudi Fransi

Finaref Nordic Locations: Sweden, Finland, Norway Shareholding structure: 100% CA Consumer Finance e249 million outstanding loans 46 employees Dan Aktiv Location: Denmark Shareholding structure: 100% CA Consumer Finance e183 million outstanding loans 42 employees Sofinco Saoudi Fransi Location: Saudi Arabia Shareholding structure: 50% CA Consumer Finance, 50% Saudi Fransi Bank e17 million outstanding loans 72 employees

Credigen Location: Hungary Shareholding structure: 100% CA Consumer Finance e3 million outstanding loans 46 employees FGA Capital Locations: Austria, Belgium, Denmark, France, Germany, Greece, Ireland, Italy, Netherlands, Poland, Portugal, Spain, Switzerland, United Kingdom Shareholding structure: 50% CA Consumer Finance, 50% FGA e14,458 million outstanding loans 1,873 employees

Forso Nordic Locations: Denmark, Finland, Norway, Sweden Shareholding structure: 50% CA Consumer Finance, 50 % Ford Group e1,156 million outstanding loans 124 employees GAC-Sofinco Automotive Finance Co.Ltd Location: China Shareholding structure: 50% CA Consumer Finance, 50% GAC e886 million outstanding loans 226 employees

Adapting in a constrained environment

Frankfurt, Germany

Proud to be involved in diversifying our refinancing sources “In Germany, we have developed a deposit business. It was essential to diversify our refinancing sources in order to deal with the sovereign debt crisis and resulting liquidity crisis. Today, Crédit Agricole Consumer Finance is more robust financially and ready to face the new regulatory challenges of Basel 3.” Markus werz, Head of the Treasury Department and responsible of the launch of the deposit business CreditPlus Bank

10

Radical changes

Current situation

The new face of consumer credit in Europe €2,095 at year-end 2012. Two years before, at year-end 2010, the average outstanding loan per inhabitant was €2,200.

The breakdown between countries remained uneven. Five countries (United Kingdom, Germany, France, Italy and Spain) accounted for more than 75% of total outstanding loans, while only representing 63% of the population of the European Union. Also, there is a clear distinction between Northern Europe, which accounts for 58% of outstanding loans (41% of the EU population); Southern Europe (including France) with 36% of total outstanding loans (39% of the population) and Eastern Europe with 7% of total outstanding loans (20% of the population).

Impacted by the crisis, the European consumer credit market, which accounts for nearly one quarter of the global consumer credit market, contracted between year-end 2011 and year-end 2012. Outstanding loans in the European Union fell 2.1% year-on-year to €1,056 billion at yearend 2012. The decline was most striking in Eastern Europe, down 4.6%, and Southern Europe, down 3.6%, with a limited 0.8% decrease in Northern Europe.

The ratio of consumer credit to total annual household consumption reflects the actual penetration rate of consumer credit. The indicator is useful in that it eliminates variances due to differences in living standards between countries. At year-end 2012, the ratio was 14% in the European Union, compared with 14.6% the previous year and 15.5% in 2010. The ratio has decreased in practically all European countries.

Marked differences in average outstanding loans A characteristic of the European consumer credit market is the marked differences in average outstanding loan per inhabitant, ranging from €186 per head in Lithuania to €3,984 in the United Kingdom at year-end 2012. The average outstanding loan per inhabitant in the European Union was €

Outstanding loans increased in only five of the 27 European Union countries in 2012, notably in Scandinavia (Finland: +3.5%; Sweden: +1.4%), but also in Belgium (+0.5%), Germany (+0.8%) and Slovakia (+10.1%).

FINLAND

Differences in outstanding consumer loans in Europe

e13.3 billion

SWEDEN

(+ 3.5 %)

e19.1 billion

ESTONIA

(+ 1.4 %)

(at year-end 2012)

e0.6 billion (- 4.3 %)

LATVIA

DENMARK

e0.8 billion

e16.1 billion

UNITED KINGDOM

e251 billion

IRELAND

e14.2 billion

(- 1.2 %)

(- 15.1 %)

(- 10.6 %) LITHUANIA

(- 3.7 %) NETHERLANDS*

e25.9 billion

(- 2.7 %) BELGIUM*

(- 0.1 %)

FRANCE*

e149 billion (- 0.3 %)

(- 5.1 %)

(- 4.9 %)

e21.2 billion GERMANY (+ 0.5 %) e225 billion LUXEMBOURG e1.2 billion

e0.7 billion

POLAND

31.6 billion

(+ 0.8 %)

CZECH REPUBLIC

SLOVAKIA

(- 0.6 %)

(+ 10.1 %)

e10.6 billion 2.9 billion

AUSTRIA

HUNGARY

(- 3.4 %)

(- 11.8 %)

e22.8 billion e4 billion ROMANIA

SLOVENIA

e13 billion

(- 8.6 %)

BULGARIA

(- 6.4 %)

e2.5 billion PORTUGAL

e11.8 billion (- 12.7 %)

SPAIN*

e71.2 billion

ITALY**

e110 billion (- 2.8 %)

Estimates by the French consulting firm Asterès Source: Assofin Note: reference exchange rate (annual average exchange rate for 2012)

**

(+ 0 %)

e30.2 billion (- 8.3 %)

(- 7.9 %)

*

e3.9 billion GREECE

MALTA

e0.4 billion (- 0.7 %)

CYPRUS

e3.3 billion (- 0.7 %)

11

New consumer expectations

services that customers now expect will have a strong competitive edge. Because customers who are satisfied at all relationship stages will become loyal and generate value.

Multi-channel customer services How do we develop customer relationships? Through a dedicated, customised, interactive site where customers can find all the information they require. For maximum flexibility and consistency, the service should be provided through all channels and at all stages of the customer experience: from the first contact by tailored solutions and personalised advice, and also when life accidents occur.

Consumption patterns and consumer expectations are changing fast. Better informed, customers are increasingly demanding, seeking both flexible and customised solutions from all sales channels. The era of empowered consumers Widespread internet use in the home – the percentage of households with high speed internet access in France was 70% in 2011 compared with 30% in 20061 – has made customers more autonomous, better informed, but also more demanding, volatile and disloyal. Consumers are now empowered. They decide to give meaning to their purchasing power. Adept at more responsible consumption, they seek an

exclusive relationship with a brand or company and are free to weigh up their products and actions.

Adapting to new expectations Improving customer relations is an effective way of dealing with increasing web-based consumption, with a 23% increase in active retail websites between 2010 and 20112. Crédit Agricole Consumer Finance plans to develop customer services in line with this new trend. Increasing customer satisfaction means providing an increasingly customised service experience, with financing solutions tailored to needs. It means listening and supporting customers at each step of their lives. Cultivating personal relationships is a key driver for Crédit Agricole Consumer Finance’s business development. Firms capable of providing the personalised

Consumers are now permanently connected to several media and need to discuss and communicate continuously. So we have to use the right channel at the right time and combine emails, web services, telephone calls, text messages, and even television and video. For instance, customers may apply for financing online – today more than seven in ten applications for personal loans are made online - and then follow-up by filing the application in a Sofinco agency or by having a customer relations manager call.

1. Source: Digital Market Observatory 2. Source: Fevad

Adapting in a constrained environment Crédit Agricole Consumer Finance Annual Report 2012

Changing consumption patterns

12

Radical changes

Changing retail circuits

E-commerce and M-commerce: widespread use of distance sales Supporting e-commerce growth

Supporting mobility and m-commerce

Online shopping has become so commonplace that ecommerce sites are now points of sale and consumption in their own right. In many countries their revenue has increased significantly. The EU e-commerce market was estimated at €305 billion in 2012, growing 22% compared with 20111.

Shopping, simply transferring money or managing bank accounts is simple from a mobile device. Revenue from m-commerce in Europe is expected to increase from €1.7 billion in 2011 to €19.2 billion in 20172. 14% of online customers, or more than 4.3 million people in France, have already bought items using their mobile phone (excluding downloading mobile apps)3.

Growth in the industry was particularly strong in Eastern European countries (25%-30% increase), such as Poland and the Czech Republic. In France, Germany, Italy, Belgium and Spain e-commerce expanded by between 19% and 25%. Three countries represent nearly 70% of the total EU market: the United Kingdom, France and Germany.

Companies need to be close to their customers by offering tailored services through m-commerce. Operators and manufacturers are racing to innovate and develop secure, user-friendly applications to support the trend.

Crédit Agricole Consumer Finance is a pioneer on the e-commerce market, having offered online financing via its dedicated website sofinco.fr since 1997. Now, Sofinco’s mobile site is available. It has been developed using responsive web design technology, which adapts the layout to the viewing environment, whether mobile phone or tablet. And since 2002, Crédit Agricole Consumer Finance has supported online retailers by providing financing solutions integrated into their online point of sale.

Eventually, it should also be possible to take out consumer credits and reschedule monthly payments by phone, as it is already the case online.

Rise of person-toperson (C2C) purchases Whether smart or responsible, second-hand shopping between individuals is an increasing share of consumption. Today, it is estimated that more than one in two internet users (51%) have sold or bought goods on C2C trading sites in the last six months4. Specialised financing companies like Crédit Agricole Consumer Finance need to innovate and support these new consumption patterns by offering technical solutions and adapted financial services.

“M-commerce is a challenge for all companies: mobile devices enable us to be closer to our customers.” Julien Lecron, Director of Innovation France

27 % of world smartphone users say they have recently used their phone to make a purchase5. In the APAC (Asia Pacific) and BRIC (Brazil, Russia, India and China) regions, there are 42%. In Europe, mobile purchases are less common with only 18% (12% in France). In the 50-64 age range, only 15% currently use this means of purchase.

1. Source: E-commerce Europe, November 2012 2. Source: Forrester, July 2012 3. Source: Médiamétrie, May 2012 4. Source: Baromètre Fevad/Médiamétrie/NetRatings, 2012 5. Source: Ipsos Global @dvisor, October 2012

Changing financial and regulatory framework

What the Lagarde law has changed in France…

The Law of 1 July 2010 on consumer credit reform, known as the Lagarde law, concerns the entire consumer credit value chain, and primarily revolving credit. While its effects were apparent as early as 2011 on new account openings, the volume of outstanding loans and even the market structure, they continued in 2012. In 2009 revolving credit accounted for 40% of total consumer credit production for all ASF6-member finance companies; in 2010 it decreased to 37% (implementation of the law mid-2010), then to 33% at year-end 2012. Since the new legislation was passed, revolving credit business has changed considerably, with a significant decrease in distribution, lower amounts financed, shorter repayment schedules and lower costs for consumers.

Revolving credit distribution decreased by 5.3 million between 2010 and 2012. At year-end 2011, 83% of open revolving credit lines were for amounts less than e3,000 compared with 72% 18 months before. The average repayment schedule for a revolving credit of e3,000 has decreased from 78 months to 31 months. The average cost for the consumer, that is, the average interest charged, was divided by 2.5 between 2008 and 2011. Interest rates declined by more than 3 points between 2008 (18.8%) and July 2011 (15.4%). The decreased cost resulted from changes in the calculation of the usury rate, which will be fully effective by April 2013, and shorter repayment schedules.

“The Lagarde law has instigated a structural transformation, requiring all financial institutions to make major changes.” Christophe Grave, Deputy CEO, General Secretary and Credit Group

Source: Athling report

The Athling report on the impact of the Lagarde law On 24 September 2012 Athling Management published a report commissioned by the Comité Consultatif des Services Financiers, CCSF (Consultative Committee of the Financial Sector) on the impact of the so-called Lagarde consumer credit law. The law introduces structural changes in the industry as did the Scrivener (1978) and Neiertz (1989) laws, with provisions impacting the entire credit distribution chain (advertising, products, pricing, distribution and even over-indebtedness). The consumer credit market contracted again in 2012 by 4.9%. Over the last five years, consumer credit production has fallen by 20%. The law on consumer credit reform has refocused revolving credit on its two primary objectives: household cash flow and minor purchases. This law is a significant and necessary step in consumer interests. However, it means that specialised consumer credit players will have to adapt their business model to the new regulatory framework.

6. French Specialised Financial Companies Association

Changes in the Italian regulatory framework There were substantial changes in consumer credit legislation in Italy this year. A decree adopted in June and published in October introduced new requirements in terms of consumer information and transparency in loan contracts. An annual survey will be conducted on changes in the cost of loans for consumers, enabling close monitoring by the authorities and Parliament. But the main focus of the new legislation is insurance policies linked to consumer loans. Under the Centaro law of March 2012 insurance contracts now grant rights for a two year period. Tacit renewal clauses in insurance policies are prohibited as of January 2013 and insurance companies have customer information obligations. Overall, it will be more difficult and costly to combine the sale of credit with an insurance policy.

14

Radical changes

Changing financial and regulatory framework

The liquidity crisis in Europe The sovereign debt crisis has continued, leading to scarcer liquidity. Some countries (Greece, Spain, Portugal...) hardly fulfill their financial obligations: debt repayments, retirement pensions, state employee salaries. Austerity plans have been implemented everywhere in Europe, strongly impacting household consumption and purchasing power.

intervened by lending to banks over longer periods and with various guarantees for longterm financing. New banking regulations (Basel 3) will require banks to modify their financing structure. They impose higher capital requirements and require banks to ensure that they have stable resources to support long-term borrowing.

For macroeconomic and regulatory reasons, banks have reduced their outstanding loans, thus lowering their refinancing requirements. The European Central Bank (ECB) has

“The European liquidities market has stabilised, but it is still shaky.” Claude Grandfils, Group Chief Financial Officer

Adjustment plan

Crédit Agricole Consumer Finance achieves its objectives In September 2011 the Crédit Agricole Group announced an adjustment plan to strengthen its solidity, particularly by reducing its dependence on the financial markets. The objectives imposed on Crédit Agricole Consumer Finance as part of this plan have been achieved: business has been downsized, refinancing sources diversified, doubtful debt divested and a redundancy plan implemented. We now have to go further…

The aim of the adjustment plan was to reduce business and diversify refinancing sources. Outstanding loans were reduced by lowering lending activity (tightening grant conditions, terminating low-profit partnerships, discontinuing business in certain entities) and disposing of doubtful debt, mainly in France and Italy for a total €1.2 billion. At year-end 2012, outstanding loans totalled €73.2 billion, down €5.2 billion from June 2011, due to the slowdown in the European consumer credit market and implementation of the adjustment plan. Crédit Agricole Consumer Finance’s minority interest in Finalia (Belgium) was sold at year-end 2012. At the beginning of 2013, Credigen finalised the sale of its entire portfolio and Crédit Agricole Consumer Finance sold its interests in Sofinco Saudi Fransi to its partner.

At the same time, Crédit Agricole Consumer Finance has diversified its refinancing sources by €7 billion since June 2011, of which €2 billion in the fourth quarter of 2012. Crédit Agricole Consumer Finance has thus achieved the objective set by the Crédit Agricole Group to reduce its refinancing requirements by €8 billion, and has strengthened its financial solidity.

77

billion

from diversifying refinancing sources since June 2011

15 Adapting in a constrained environment Crédit Agricole Consumer Finance Annual Report 2012

France

An ambitious Transformation plan In France, where Credit Agricole Consumer Finance faces particular challenges due to the severe contraction in the domestic market and increased regulations and competition, Management has adopted an ambitious new business plan. Focusing on innovation, customer satisfaction and operational efficiency, the aim of the plan is to build sustainable competitiveness.

The Transformation plan presented to Crédit Agricole Consumer Finance France’s employees in April 2012 is built on three pillars: innovation, customer satisfaction and operational efficiency. The company’s structure has been redesigned to address these challenges. Departments have been created dedicated to customer satisfaction, innovation and customer relations for all business lines. The Marketing, Finance and Project Management departments gather the teams working in these areas. Finally, governance in France has been separated from Group governance. The strategy aims to guarantee competitiveness in the long term and respond to Crédit Agricole Consumer Finance’s challenges.

A limited social impact Employee representatives were consulted and informed of the plan. An opinion was issued on 9 November and 15 November 2012. The redundancy plan concerning 119 net job losses was negotiated with the unions and an agreement signed by the majority of those involved. By providing for a period of voluntary redundancy, the impact of the plan was limited to 20 job losses. All employees concerned were offered internal job transfers. The new organisation resulting from the Transformation plan became effective on 1 April 2013.

16

Radical changes

Financial results

Reflection of adapting to a restricted environment Since Summer 2011, Crédit Agricole Consumer Finance has been toiling in a sluggish economic and financial environment. 2012 was marked by the implementation of the adjustment plan, the deterioration in Agos Ducato’s cost of risk, and the continuing negative impact of regulatory changes in France and Italy.

Crédit Agricole Consumer Finance reported a loss of €1,605 million for 2012 taking into account goodwill impairment of €1,496 million registred in the Crédit Agricole S.A. account1. The goodwill impairment reported by Crédit Agricole S.A. was due to new prudential requirements (Basel 3), the increase in regulatory constraints on consumer credit and the deteriorated economic situation in some countries, particularly Italy, along with Agos Ducato’s difficulties. They have no impact on Crédit Agricole Consumer Finance’s equity ratios (solvency) or cash flow. Adjusted for impairment, Crédit Agricole Consumer Finance reported a loss

of €109 million, a sharp decline in earnings compared with 2011 (€363 million), due to the deterioration in Agos Ducato’s cost of risk and lower income. The decline in net banking income for 2012 (down 13%) resulted from increased refinancing costs (longer maturities to secure financing), the decrease in outstanding loans under the adjustment plan, and the Lagarde law, effective in France since the second half of 2011.

Credit Agricole Consumer Finance key figures (at year-end 2012) Net banking income

Cost of risk

72,908

-71,974

million Income contracted further: due to the decrease in outstanding loans under the adjustment plan, longer refinancing maturities, and unfavourable regulatory developments particularly in France and Italy.

million

Excluding non-recurring items and cost of risk in Italy, -4.1% improvement in cost of current risk.

managed Outstanding loans

773.2 Gross operating income

71,6441 million Contraction in net banking income partially offset by continued improvements in operating efficiency (operating expenses down 7.8%2, despite greater fiscal pressure in 2012).

billion

FitchRatings

F1+ Short term A+ Long term

Standard & Poor’s

A-1 Short term A Long term

17 Adapting in a constrained environment Crédit Agricole Consumer Finance Annual Report 2012

The cost of risk was up 41% in 2012, mainly due to the deterioration in Agos Ducato’s portfolio and provisioning by the subsidiary. New management implemented a robust action plan to enhance collection and litigation, and measures to limit loan production. Adjusted for provisions in Italy and exceptional items, the cost of current risk decreased by 4.1% year-on-year. Despite higher over-indebtedness, Crédit Agricole Consumer Finance France’s cost of risk decreased by 14% year-on-year, the fourth quarter being the lowest since the third quarter of 2008.

and the Portuguese entity remained stable despite the difficult economic context. These results illustrate the need for Crédit Agricole Consumer Finance to continue adapting to changes in its business environment by strengthening its international reach through the creation of its Corporate Center, and improving competitiveness. In France, this means implementing the Transformation plan to build sustainable competitiveness using the new business model based on innovation, customer satisfaction and operational efficiency.

Efforts by all entities All entities strove to improve operational efficiency, bringing operating expenses down 7.8%2 year-on-year, despite higher fiscal pressure in 2012. International automobile partnerships performed well, boosted by the sharp increase in Jaguar Land Rover partnership business (for FGA Capital) and growth in the Chinese subsidiary GAC-Sofinco AFC, which doubled business in one year. Among the other entities, the German, Scandinavian and Moroccan businesses were strong

1. Excluding allocation of Crédit Agricole S.A. expenses 2. Adjusted for recurring items and 2012 tax increase

A consumer credit multi-specialist

Paris, France

Proud winner of Élu service Client de l’Année 2013 1 award “Every day, I serve my customers. I offer customised solutions enabling them to finance their projects and buy the things they need. I am very proud that Sofinco won the Élu service Client de l’Année 2013 1 award.” MEHDI CHKARAT, Deputy-manager of the muti-channel agency in Évry Crédit Agricole Consumer Finance France

1. Customer service of the year 2013

Specialised services

20

A wide range of products and services

Through its different brands Crédit Agricole Consumer Finance provides individual customers and retail professionals with a wide range of customised financing solutions.

Loan repurchases (or debt consolidation)

Installment loans

Insurance

Installment loans are granted to purchase goods or services. The repayment period is set contractually, generally with a fixed monthly payment schedule. There are two types, personal loans that are contracted through branches, online or over the telephone, where the borrower receives the amount loaned directly, and point-of-sale loans provided by retailers and linked to a sales contract.

Crédit Agricole Consumer Finance offers customers a diversified range of insurance solutions with its credit products (such as borrower and credit card insurance) covering goods sold or financed by partners and credit providers (extended guarantees, additional car insurance, breakdown, theft and vandalism cover) or standalone insurance (funeral insurance, legal protection, accident assurance, credit card insurance, etc.).

Revolving credit

For instance, borrower insurance covers the repayments due from the borrower in the event of the borrower’s death, loss of employment or disability.

This is a permanent credit line, which can be used at any time by a customer within the pre-approved credit limit. It is replenished by customer repayments. It may be associated with a bank card or private payment card (payment card associated with a retail brand). Lease purchase agreements The lessee pays a guarantee deposit then monthly lease payments. The financial establishment retains ownership of the asset financed until the customer exercises the purchase option at the term of the agreement. Long-term leases This product is used to finance corporate vehicle fleets. The company selects new vehicles, which are purchased and financed by the leasing company, which retains ownership. In addition to providing vehicles for use, long-term leases include services such as assistance and maintenance.

This enables several outstanding loans to be combined in one single loan, with a single monthly repayment.

Savings Since 2011, Crédit Agricole Consumer Finance has provided savings products for institutions through its German subsidiary CreditPlus Bank. In 2012 it set up savings for individual customers.

21

Klaus Tragesser, Director sales finance CreditPlus Bank

Motorcycle financing: new partnership between Triumph and CreditPlus Bank The Manufacturer Triumph Motorcycles and CreditPlus Bank join forces in a partnership effective from 1 January 2013. Motorcycle buyers in Germany and Austria will enjoy special conditions and rapid processing of their financing applications. Thanks to new online loan software, applying for customised financing and being accepted only takes minutes at Triumph dealerships.

Car financing

Financial partner of major manufacturers Crédit Agricole Consumer Finance is a major provider of car financing. The business is mainly operated through joint ventures with leading car manufacturers, and also through specific national and international partnership agreements. Crédit Agricole Consumer Finance provides car manufacturers with car financing expertise, particularly in terms of risk and financial management, through the joint ownership of captive finance companies. Crédit Agricole Consumer Finance also partners car manufacturer by providing financing solutions to their customers and for the inventories of car dealers. Three examples illustrate the partnership model. FGA Capital, a joint venture set up in 2006 between Crédit Agricole Consumer Finance and Fiat Group Automobile, now handles all customer and dealer financing in thirteen European countries for the Fiat, Lancia, Alfa Romeo, Fiat Professional, Abarth, Chrysler and Jeep brands. Since 2009 FGA capital

has also been the financial partner of the Jaguar and Land Rover brands in several European countries. FGA Capital offers customers extended guarantees combined with financing solutions for new or secondhand vehicles. FGA Capital also offers retailers legal protection. Forso Nordic AB, created in 2008, is the captive finance company operating for the Ford, Mazda, Volvo, Jaguar and Land Rover brands in the Northern European countries. In Norway, “Super Saturday” events were held to boost car sales using financial leveraging. Forso Nordic AB financed 90% of sales generated at the events. GAC-Sofinco Automotive Finance CO Ltd (Gac-Sofinco AFC), the car financing business launched in 2010 with Chinese car manufacturer Guangzhou Automobile Corporation (GAC), exceeded its objectives while effectively controlling the cost of risk. It handled financing for more than 40,000 individual customers in 2012 representing €500 million in new loans. Including the financing of dealers’ vehicle inventories, the joint venture reported a total €900 million of outstanding loans. Four manufacturers work with CAC Sofinco AFC: GAC Honda, GAC Toyota, GAC Motors and recently

GAC Fiat. GAC-Sofinco AFC performed well with the GAC Motors network due to exclusive advertising campaigns and sales of GAC Motors’ highly successful SUV. At year-end 2012 nearly 800 points of sale worked with GAC-Sofinco AFC in almost all the Chinese provinces.

Renewal of the agreement with Mazda Finance Mazda and Crédit Agricole Consumer Finance renew the partnership agreement set up in 2009 for five years. It covers two main activities: financing individual customers’ vehicle purchases under the Mazda Finance brand and financing dealers’ inventories of vehicles for sale and demonstration. Today, thanks to the venture between Mazda and Crédit Agricole Consumer Finance, one in every three vehicles are sold with financing.

A consumer credit multi-specialist Crédit Agricole Consumer Finance Annual Report 2012

“Our expertise and dynamic teams enabled CreditPlus Bank to win this new partnership with one of the world’s most established motorcycle manufacturers.”

22

Specialised services

Supporting retailers and specialised distributors

Financial partner of major retailers 

Consumer credit has always played a major role in retailing and commerce. It enables customers to purchase goods and finance the purchase in the same place at the same time. Financial partner of major retailers and specialised distributors in various sectors, Crédit Agricole Consumer Finance provides customised and innovative financial services.

A broad, highly-diversified portfolio Crédit Agricole Consumer Finance has two types of relationships with its partners: business partnerships and structured partnerships. Business partnerships entail paying retailers for bringing customers and business through their retail stores or websites. In exchange, Crédit Agricole Consumer Finance offers financing products. This model is used by Printemps, Fnac or La Redoute. Structured partnerships can be joint ventures with a brand, as is the case for Castorama and Darty. In this case, the financing solutions provided in stores or through other channels carry the brand name. Partnerships play a key role in Crédit Agricole Consumer Finance’s development. They allow the company to attract approximately 900,000 new customers per year and generate nearly €4.5 billion in new loans. Open window on other marketing practices, they constantly encourage excellent service quality, innovation and responsiveness. Crédit Agricole Consumer Finance adapts its procedures and retailing methods to its partners, in line with customer requirements and expectations.

By redesigning products, modernising infrastructure, and implementing paperless procedures, customer experience is enhanced and long-term profitability of the constantly-changing business is assured.

An innovative solution: e-statements Paperless statements are a new secure, rapid and simple customer service. Customers receive an email when their statements are available. They can be viewed in the online customer space along with the archives for 36 months. Free, e-statements fulfill customer requirements and improve customer relations by optimising the customer experience, building loyalty, and backing up information and exchanges. Offered to Sofinco’s Réserve Couleur® customers since 2010, paperless statements were launched successfully for customers of La Redoute, Finaref and Castorama at the end of September 2012. The objective is to have 10% of customers opt for e-statements by 2013.

Free Mobile, a connected partner

63 % of customers that have opted for e-statements are happy with the system (survey of Sofinco customers conducted in June 2012)

Crédit Agricole Consumer Finance supports Free Mobile by enabling the operator’s subscribers to buy new phones and pay in several installments at no additional cost or via customised financing solutions. Financing is a key means of differentiating from competitors. Subscribers are aware of the actual cost of their telephone, unlike the usual offers where the cost is hidden in a “phone plus service” package. At the end of December, more than 140,000 accounts had been opened, 60% of which were new customers for Crédit Agricole Consumer Finance.

Interview WITH OPHÉLIE ROBIN Manager of the Printemps partnership

Guiding our partners through regulatory changes

What is «sales training»?

Why to opt for e-learning?

Sales training is one of the items defined by the Law on Consumer Credit. While the implementation decree was only published in 2012, Crédit Agricole Consumer Finance set up e-learning courses to train partners’ salespeople in selling financing as early as 2011. The key objective of the courses is to explain the main principles of consumer credit. They specifically focus on promoting responsible credit by betterinforming customers on their contracts, making lenders, retailers and customers more responsible, and avoiding overindebtedness. They also explain the major changes resulting from the new regulatory framework on consumer credit products.

There are several benefits. The first is traceability, which ensures that all financial advisors in stores have been trained. The second is training course content. The e-learning format is identical for all and is user-friendly and flexible. Salespeople can take the courses whenever they are free. The third benefit is e-learning modularity, enabling training and content to be adjusted to each partner’s profile.

24

Specialised services

Supporting Crédit Agricole Group’s ambition

Excellence serving Crédit Agricole Group retail banking Crédit Agricole Consumer Finance contributes to the success of Crédit Agricole Group’s strategy, aimed at becoming the leader in universal customerfocused banking, by forging partnerships with the banking networks and insurance businesses and by providing teams, resources and products to customers through all networks.

In France, Crédit Agricole Consumer Finance draws on its knowledge of risk management, marketing and debt collection to serve Crédit Agricole’s Regional Banks and the LCL banking network. In 2012, Crédit Agricole Consumer Finance further contributed to developing the consumer credit services offered by Crédit Agricole’s Regional Banks. Today, Crédit Agricole Consumer Finance provides Cartwin/ Supplétis revolving credit in partnership with 35 Regional Banks.

As a centre of excellence, Crédit Agricole Consumer Finance provides expertise and know-how to Crédit Agricole Group’s retail banks in France and abroad.

In Italy, Agos Ducato supports Crédit Agricole’s Cariparma network branches.

Survey In France, Crédit Agricole’s Regional Banks are highly satisified with the services provided through Banking Partnerships with Crédit Agricole Consumer Finance France. In an online satisfaction survey conducted in 2012, Crédit Agricole’s Regional Banks gave the services provided by Crédit Agricole Consumer Finance’s Bank Marketing department 7.7 out of 10 for satisfaction. They particularly appreciated the sharp 2013 marketing plan and relationships with the Banking Partnerships’s Marketing teams. Crédit Agricole’s Regional Banks applauded the expertise and highquality listening and people skills of Crédit Agricole Consumer Finance’s staff.

713.3

billion

outstanding consumer loans managed for the Crédit Agricole Group at year-end 2012

For LCL, the year was devoted to bringing products into compliance with new regulations, particularly by launching a new credit repurchase product.

Expanding the Group’s insurance business Crédit Agricole Consumer Finance’s “Insurance” business entails designing, creating and distributing insurance and assistance, in line with Crédit Agricole Consumer Finance’s global strategy and essentially with the support of the Group’s insurers. The insurance market has real development potential for Crédit Agricole Consumer Finance. The service offering ranges from borrower insurance for consumer credit to accident protection and goods insurance, in France and abroad. Crédit Agricole Consumer Finance aims to extend such services to all countries in which it is present, by strengthening its partnerships with Crédit Agricole’s insurance companies (Crédit Agricole Creditor Insurance, Pacifica et Predica).

Crédit Agricole Consumer Finance provides consumer credit to numerous customers. CACI is Crédit Agricole Group’s borrower insurance specialist. Borrower insurance guarantees that the lending financial institution is repaid when circumstances arise preventing the borrower from paying.

25 A consumer credit multi-specialist Crédit Agricole Consumer Finance Annual Report 2012

Point-of-sale financing

Providing retailers with point-of-sale financing  Retailing and commerce are part of the DNA of Crédit Agricole Consumer Finance, with some brands originating in retailing. Pointof-sale financing reflects Crédit Agricole Consumer Finance’s presence close to its partners and customers. Crédit Agricole Consumer Finance provides financing for vehicles, home equipment and home improvements.

The electronic processing of applications for car financing has boosted the market. To support growth in dealers’ business, Viaxel (Crédit Agricole Consumer Finance’s brand dedicated to point-of-sale vehicle financing in France) has created a new customerfriendly pricing application. Available for all smartphones, the “c-ready” appli was launched in December 2012 at the Paris Motor Show. The pricing application enables car dealers to simulate financing for individual customers and small businesses and access a full financing plan. Dealers can also view information on all associated services and sales pitches on the financing products. •••

Number

1 

Credibom is the leader of car financing in Portugal

“The c-ready solution is great sales lever for car dealerships.” Patrice Locussol, Manager of Viaxel Car financing market France

Specialised services

26

••• The c-ready application has also been developed for Viaxel’s retail partners in the home equipment, recreational vehicles and yachting markets. It has proved a great success, having already been downloaded by more than 5,000 users. Viaxel also provides car, motorcycle and recreational vehicles dealers a tool for developing online sales. @TOUTFI is a simulator directly integrated into the dealer’s website. It can be customised and offers a full range of financing, insurance and associated services, such as maintenance and extended guarantees. Since 2012 @ TOUTFI has also provided an integrated database enabling dealers to contact customers that have used the simulator.

Interview with Catherine Chamroux Product Manager, Crédit Agricole Consumer Finance France

equipment, insulation) or in terms of well-being (swimming pools). Sofinco offers innovative guarantees enabling customers to make the most of purchases. Heat and sunlight are guaranteed, otherwise monthly payments are reimbursed.

How is Météassur innovative?

Innovation serving our partners Météassur won the 2012 Silver Insurance Trophy for product innovation. The product covers weather risk and is provided alongside Sofinco financing for home improvement markets (heating, windows, insulation, swimming pools and photovoltaic material).

What does the product promise?

Innovation

One of households’ main objectives when making home improvements is return on investment: either in terms of energy savings (new heating systems, windows, photovoltaic

Taking out a loan using a tablet A new application for tablets was launched in the last quarter of 2012 by some equipment retailers. It is a major innovation enabling the entire financing application process to be made online. Retailers fill out credit applications with their customers before photographing the required documents. Using an electronic signature, customers sign the loan contracts directly. They receive a reply within ten minutes, after the applications have been assessed Crédit Agricole Consumer Finance’s teams, who directly verify the e-applications.

CreditPlus Bank, Number 2 credit provider for German dealers The Bank Monitor market survey published by the Autohaus magazine in 2012 ranked CreditPlus Bank second among independent credit providers for car dealers. Among the thirty criteria assessed, CreditPlus Bank’s responsiveness, expertise and quality assistance were particularly appreciated by the 1,000 dealers surveyed.

It is the first insurance covering weather events in the home improvement market. It automatically reimburses customers without requiring claims or other procedures. The offer is customised to the location of customers’ homes (French administrative department) and is fully transparent being based on the weather conditions reported by the French weather station Météo France, which acts as a trusted third party. Information can be viewed on a website designed for customers.

27 A consumer credit multi-specialist Crédit Agricole Consumer Finance Annual Report 2012

Direct sales

Serving customers Crédit Agricole Consumer Finance’s strategy is to make consumer credit conveniently available for the maximum number of people, by using a wide range of complementary distribution channels. Services can now be accessed in branches and over the phone, but also online and via mobile applications.

Sofinco won Élu service Client de l’Année 2013 1 award Nearly one in two people in France have contacted customer services during the last 12 months. High quality customer relationships are essential, as 84% of people in France believe that companies’ overall image is affected by customer service. 75% of people are willing to decide against buying a product if they are disappointed with customer service. Customer satisfaction is one of the pillars of Crédit Agricole Consumer Finance’s strategy. Structural changes were implemented in 2012 in order to optimise the quality of customer services: deployment of an effective system for measuring customer satisfaction, staff training, awareness campaigns and technical development of customer relationship management tools.

On October 18, Sofinco, Crédit Agricole Consumer Finance’s brand in France, won Élu service Client de l’Année 20131 award in the “Credit institution” category. The award is recognized by the general public and small businesses as a measurement of the quality of customer service in French companies. It exemplifies Crédit Agricole Consumer Finance’s key strategy on customer-focused services. The teams are proud of the award, which reflects their daily commitment and the commitment of the entire firm to serving customers.

1. Customer service of the year 2013. Survey conducted by Inference Operations Viséo Conseil from May to July 2012 using the mystery shopper technique at 215 telephone, email and web-based touchpoints.

“Customer satisfaction is essential in our business. An unhappy customer can damage the company’s reputation, whereas a satisfied customer will spread the good word.” Élodie Devauchelle, Marketing Manager, Partnerships Department, Crédit Agricole Consumer Finance France

Specialised services

28

Agos Ducato’s new campaign

“The crisis has made financial institutions adopt more responsible behaviour toward customers. For Agos Ducato, offering consumer credit is first and foremost providing support for their projects.” Alain Breuils, Chief Executive Officer of Agos Ducato

CREDITPLUS Bank on the social networks CreditPlus Bank is present on social networks such as Facebook and Twitter and has a dedicated brand blog www.creditplusblog.de. The blog discusses new issues each month, such as “How do teenagers use money?”, positioning the brand as an expert in daily money management. The brand also uses the German professional social network, Xing, to post job offers and market the company, and Twitter to keep in contact with journalists and professional bloggers. These new media enable the bank to sustain a modern, open and transparent dialogue with a community of experts and customers.

Agos Ducato officially launched a new communication campaign during the last quarter of 2012. Its aim is to underline the company’s commitment to Italian families: hands-on presence and support for their projects. With the slogan “Italy still deserves credit”, the campaign carries a strong message encompassing the economic environment and financial difficulties facing the country. The message was disseminated through a poster campaign in the Italian cities of Milan and Rome and through advertisements in daily papers.

3rd

CreditPlus Bank takes place in tests by the German economic weekly “Euro am Sonntag” gaining a “Very good” rating with 80.1 points. Ten German credit providers’ installments loans were assessed on the basis of the following criteria: loan conditions, price/quality relationship, service and advice.

29 A consumer credit multi-specialist Crédit Agricole Consumer Finance Annual Report 2012

Credit brokerage

A year of consolidation Crédit Agricole Consumer Finance provides credit brokerage in the Netherlands through the Ribank, Interbank and DNV NVF brands. During 2012 it strengthened the market position of Créditlift Courtage, gaining a firm foothold in France in the new distribution channel.

Leader in the Netherlands CA Consumer Finance NL consolidated its leadership position, in a sluggish credit market, achieving nearly 24% of the market share of outstanding loans. To adapt and improve customer satisfaction, Crédit Agricole Consumer Finance NL launched a number of projects to enhance customer relations and operational efficiency. They included deploying a new sales system and revamping customer web applications. Given the gloomy outlook for 2013, Crédit Agricole Consumer Finance NL will focus on diversifying its distribution channels and products.

using a consumer loan (without any guarantee). The advantages? Once the loan has been granted, customers have a single monthly payment for a smaller amount, in line with their budget. The HypoLift range comprises two products: HypoLift Conso, which is a personal loan with a mortgage guarantee and HypoLift Immo, which is a real estate mortgage loan. In the increasingly stringent economic and regulatory environment, being close to customers to listen and advise are key to developing this distribution channel, due to its strong positioning on complex products.

11% CréditLift Courtage market share in 2012

24% Crédit Agricole Consumer Finance NL market share in 2012

CréditLift Courtage, a key player on the credit brokerage market in France The purpose of Créditlift Courtage, Crédit Agricole Consumer Finance’s brand specifically dedicated to brokerage, is to serve bank intermediaries and customers by providing credit solutions and associated insurance products. In 2012, CréditLift Courtage expanded significantly increasing business by 13% year-on-year, while the market contracted by 5%. The strong performance was due to three factors combined: a new sales drive with a differentiated range of services by brokerage type (VIP, Privilège, Premium), further optimisation of operating processes and the launch of the new mortgage repurchase offer, called HypoLift, which was welcomed by the market. This product meets highly specific needs. It offers an alternative to restructuring debt for customers that wish to buy their first home but their debt is too high to repurchase

“The launch of HypoLift is a major new step in our development strategy. The new product positions Crédit Agricole Consumer Finance – via its CréditLift Courtage brand – as a key brokerage provider in France, as we now have the full range required to serve the market.” Philippe Corion, Brokerage Sales Development Director, Crédit Agricole Consumer Finance France

30

Specialised services

Savings and Insurance

Insurance, needed diversification   Historically present on the borrower insurance market, Crédit Agricole Consumer Finance has diversified its insurance business by launching new products in France and in other entities. Crédit Agricole Consumer Finance is now present in all lines of insurance business, from borrower insurance taken out with loans, to accident insurance, financial loss insurance, credit card insurance and insurance on personal property items. Insurance services are offered in all countries where Crédit Agricole Consumer Finance operates, except for the Netherlands.

The retail force of Crédit Agricole Consumer Finance serving insurance Alongside the revamped borrower insurance services, additional car, goods and personal insurance products were introduced in 2012. A new comprehensive insurance policy was welcomed at the 2012 Paris Boat Show. In terms of accident insurance, hospitalisation coverage was launched in 2012, while an injury guarantee providing for the payment of capital in the event of an accident or fracture, was launched in 2013. These new products are the fruit of close cooperation between Crédit Agricole Consumer Finance and Crédit Agricole Assurances including CACI. In addition, the recent creation of a single customer relations centre should provide

a 360° view of all a customer’s insurance contracts, in the long term. Such services are in line with the Group’s clear strategy to improve customer relations.

Introducing new insurance products in Portugal In Portugal, Credibom’s borrower insurance business performed well. New insurance products are being developed and should be launched by the end of the first half 2013.

22 % of managed insurance premiums by Crédit Agricole Consumer Finance no longer relate to borrower insurance

Interview with Stéphane Roger Director of Intermediated Financing and Insurance Crédit Agricole Consumer Finance France

What were the significant events in 2012 for Crédit Agricole Consumer Finance’s insurance business? Following on from the Moving Forward Together plan, we created an insurance business line to help the various entities to work together, maximise best practice and strengthen our bargaining power with insurers.

What are the activities of the business line? It focuses on three key indicators: developing insurance business, diversifying insurance premiums and insurance services provided within the Crédit Agricole Group.

How do you work within the Crédit Agricole Group? We aim to develop insurance services that are designed and managed internally by the Crédit Agricole Group. Today, 53% of premiums are contracted between Group companies. In France, the percentage is as high as 85%. We also intend to become more specialised, by transferring all our claims management in France to the Crédit Agricole Creditor Insurance (CACI) platform.

Festgeld: a new CreditPlus Bank savings product In June 2012, CreditPlus Bank launched a deposit collections business for individual customers, to diversify refinancing sources. The new Festgeld savings product enables CreditPlus Bank’s customers to invest between e5,000 and e500,000 in term deposit accounts. It is available exclusively online to individual customers residing in Germany. Money deposited by savers is invested on the German market for a period ranging from 12 to 72 months at the saver’s choice. Interest is paid out annually or capitalised in the Festgeld account.

A committed player

Lyon, France

Proud to have participated in Sidaction 2013 “Crédit Agricole Consumer Finance has supported Sidaction for several years. I am proud to be able to contribute to this cause, and proud that my company supports me by mobilising resources.” Arthur BERNE, Customer services manager, Lyons multi-channel agency Crédit Agricole Consumer Finance France  

34

Commitments

HR Commitments

Actively preparing for change  Crédit Agricole Consumer Finance is committed to responsible relations with employees, partners and customers. In terms of human resources, Crédit Agricole Consumer Finance supports employee expectations and development by providing training and managing change and careers. It promotes citizenship through social development policies.

Actively preparing for change Training policy is aimed at developing employees to enhance collective efficiency and promote a common corporate culture within Crédit Agricole Consumer Finance. In 2012, Crédit Agricole Consumer Finance continued to implement the action initiated in 2011 as part of the Moving Forward Together plan, to develop and support managers. The company’s top 200 managers were given training on the management principles. After recalling the model’s objectives in terms of Crédit Agricole Consumer Finance’s strategy, managers were given practical experience of implementing the associated principles and key behaviour and establishing their own professional development plan. In line with the company’s Transformation plan, Crédit

Agricole Consumer Finance provided managers with specific support on change management. Training was offered from the year end to prepare managers to handle and accompany their teams through change.

management application and view the associated offer or register for open sessions held by the Human Resources Department. The system provides managers with a complete view of their teams’ training activities enabling them to better manage employees’ requests for training.

A broader individual training programme Courses were promoted to boost employees’ professional development. Individual training was given particularly on career-path development and for employees in the second half of their careers. The training teams held information sessions throughout 2012 to ensure that employees were fully aware of and understood the offer and specific procedures and processes.

72.86

million

dedicated to training in 2012, plus an exceptional allocation of €450,000 for the Transformation plan

A “self-service” system was set up enabling employees to enter their training requirements into an internal career

CAREER MANAGEMENT SYSTEMS During 2012, the team appraisals process was enhanced to identify resources and facilitate mobility both within Crédit Agricole Consumer Finance and Crédit Agricole Group. It will enable human resources to be managed in line with future developments in the company and various divisions, and succession plans to be prepared for the most strategic positions. Crédit Agricole Consumer Finance organised interviews for 230 employees with their career manager as part of its policy for senior employees. In connection with the reorganisation, more than 100 employees had seized internal mobility opportunities at 31 December 2012, including 35 transfers to the Group. Finally, more than 1,000 Crédit Agricole Consumer Finance employees participated in 51 information meetings held with Crédit Agricole S.A., LCL and the Regional Banks to improve knowledge of the Group’s businesses and activities, in connection with Crédit Agricole Consumer Finance’s Transformation plan.

35

=

143

interns on sandwich courses in 2012

600

managers received training in the prevention of psychosocial risk

1

=

new agreement signed on equal opportunities for men and women in the workplace

Crédit Agricole Consumer Finance has signed several agreements and charters: – Charter on Diversity – Charter on Parenthood – Charter on Sustainable Development – Agreement on Equal Opportunities for Men and Women in the Workplace

Crédit Agricole Consumer Finance, committed to solidarity and citizenship

Crédit Agricole Consumer Finance also provided support to schools and training organisations for disabled people.

In 2012, Crédit Agricole Consumer Finance further implemented its policy to foster equal opportunities and diversity both at national and local level.

Moreover, Crédit Agricole Consumer Finance confirmed its commitment to supporting disabled people by signing the third Crédit Agricole S.A. agreement, which introduces new measures to support the professional development and career paths of disabled employees.

Promoting the employment of disabled people Crédit Agricole Consumer Finance has adopted a proactive policy to promote the recruitment and sustained employment of disabled people. Five disabled people were recruited in 2012. Various measures were also undertaken to fund specialised transport, adapt workstations, fund hearing aids, adapt vehicles, and enable teleworking and more subcontracting to firms that employ and provide disabled people with special facilities and support. As part of a week for the employment of disabled people, all employees were made aware of disability issues through webbased communication, poster campaigns and theatre shows.

=

Equal opportunities for men and women A new agreement on equal professional opportunities for men and women was signed on 6 July 2012. It sets out a specific training programme to promote the advancement of women and their access to management positions. Young people More than 143 interns on sandwich courses joined the company in 2012, along with 125 secondary school interns including 28 young people aged 14-15 and 306 summer interns.

Local presence As member of the proactive corporate social responsibility network IMS-Entreprendre pour la Cité, Crédit Agricole Consumer Finance held three IMS 91 meetings in its premises, while interview simulation workshops were held to support jobseekers at the Évry job centre in France. Psychosocial risk Crédit Agricole Consumer Finance’s 600 managers received training in the prevention of psychosocial risk as part of the Aim for Top Health plan. Employees were given the opportunity to discover stress management techniques through sophrology workshops.

A committed player Crédit Agricole Consumer Finance Annual report 2012

Key figures in France

36

Commitments

Corporate Social Responsibility (CSR)/ Environmental Commitments

Committed to safeguarding the environment Main developments in FReD To develop and strengthen its corporate social responsibility policy, Crédit Agricole Consumer Finance has adopted the approach initiated by Crédit Agricole Group: FReD. After a pilot phase in 2011, the policy was deployed in all the subsidiaries in 2012. FReD is the acronym of the three-fold programme: F for FIDES reflecting the company’s responsibilities towards customers, Re for RESPECT covering employee and citizenship-related plans and D for DEMETER, centralising environmental conservation measures. It combines 15 corporate action plans, validated by the Executive Committee on company-wide issues such as human resources, energy, ethics and customer relations. All employees are encouraged to actively participate in the action undertaken. FReD provides support and greater capacity for Crédit Agricole Consumer Finance’s CSR commitments. To assess progress in action plan implementation, Crédit Agricole Consumer Finance performs an annual performance assessment using an independent evaluator. The average progress points for each action plan determine the FReD index. The average of the indices for each entity determines Crédit Agricole S.A.’s global CSR index. In 2012, Crédit Agricole Consumer Finance was second in the Group in terms of index progress.

The Sustainable Development representative is also the FReD or Corporate Social Responsibility (CSR) manager. Joint action is undertaken continuously with Crédit Agricole S.A., particularly by regularly sharing best practice with the CSR representatives in the Group’s subsidiaries. Various FReD measures have been undertaken: an inter-company car-pooling platform was set up in 2012 in Northern France. Several teams work regularly with vocational rehabilitation centres for disabled workers and only a few months after the launch of the go paperless scheme, already 9.3% of statements are paperless.

Involving all stakeholders in CSR policy Purchasing As part of CSR policy, social and environmental clauses have been included in contracts and calls for tender. They mainly concern commitments to corporate citizenship, environmental conservation, respectful human and employee relations, ethics and sustainable development. A questionnaire is included as part of tender documents, enabling the analysis of suppliers’ policies in terms of Corporate Social Responsibility.

CARE in the Netherlands In mid-2012 Crédit Agricole Consumer Finance NL launched an environmental programme called CARE. It aims to boost environmental concerns in daily activity. The objective is zero use of paper, waste sorting, energy savings, reuse of coffee cups... all initiated as part of the programme, which has its own logo and internal communication campaign.

Transport In order to promote public transport for commuting from home to work, Crédit Agricole Consumer Finance subsidises a substantial portion of the cost of transport passes. Given the company’s multi-site structure, it has substantially increased tele-conferencing and video-conferencing facilities. The company car fleet is selected based on consumption and C02 emissions. A campaign was held in 2012 promoting 0% financing for electric vehicles. Waste and resources processing Waste sorting and processing has been set up in the main sites in France for paper, batteries, bulbs, aluminium cans, printer cartridges and office equipment. Similarly, all telephone equipment is now collected and recycled by local companies with the vocation to employ and adapt facilities for disabled people. The go paperless statements plan continued and online fax is currently being set up in the retail branches. And a policy to control and reduce energy and water consumption was established in conjunction with the operational real estate division of Crédit Agricole Immobilier.

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Active in corporate citizenship Crédit Agricole Consumer Finance encourages employees who wish to engage in social or humanitarian projects. In 2012, the company provided staff and equipment for several solidarity events. CreditPlus Bank promotes financial education Since 2010, CreditPlus Bank employees have participated in a financial education scheme for young children. In 2012, they taught children from a primary school in Stuttgart how to manage a budget responsibly. They showed the children how to assess and better identify the risk relating to financial management. The schoolchildren

also visited CreditPlus Bank’s offices to learn about the banking business. Since the beginning of 2012, CreditPlus Bank has extended its financial education scheme to other organisations, which offer workshops for disadvantaged adolescents on various subjects including financial education. CreditPlus Bank’s staff drew the adolescents’ attention to the risk of overindebtedness and then invited them to visit the bank’s headquarters in Stuttgart.

event was also held with the children’s institution Lyreio, in order to improve the living conditions of the children and young residents. Credicom volunteers contributed significantly. In order to mobilise all staff, emails were sent specifying the children’s requirements. The volunteers and Human Resources Department joined forces to collect the objects donated by staff for Lyreio. Information on the entire programme was sent to the Group’s partners and suppliers with the year-end greetings.

Credicom supports vulnerable groups In Greece, Credicom Consumer Finance provided support for the second consecutive year to seven nonprofit organisations, through donations and the collection of clothes and food for orphaned, disabled and sick children. A community

Sidaction Report 30, 31 MARch and 1 ApRIL 2012

270 Supporting employees’ commitments

staff volunteers

For the fifth consecutive year, Crédit Agricole Consumer Finance provided call centre facilities for Sidaction. On 30, 31 March and 1 April 2012, Crédit Agricole Consumer Finance was one of the top three companies in France in terms of time donated. The 270 staff volunteers collected €234,552 in pledges, which is more than 5% of total pledges nationwide.

7234,552 pledges

A committed player Crédit Agricole Consumer Finance Annual report 2012

Commitments to society

Reinventing the business model

Hong Kong, China

Proud to have transformed a start-up into a profitable business “I am proud to have been involved in transforming a start-up into a profitable company and driving GACSofinco AFC’s growth in China. Three years after setting up this joint venture, we have over €900 million in managed outstanding loans, and we granted around 44,000 loans to individual customers in 2012.” Mr. Zeng Zhaoxi, Credit Risk Department Manager GAC-Sofinco AFC

40

2013 Outlook

Transformation – ISEO

Restoring sustainable competitiveness  The Moving Forward Together strategic plan launched in 2011 enabled us to prepare for various changes in the consumer credit business. The worsening of the economic environment means that Crédit Agricole Consumer Finance has to transform more quickly and more extensively.

Moving Forward Together, a common vision The sovereign debt crisis of summer 2011 strongly impacted banks, which announced plans to restructure and deleverage in order to reduce their exposure to the financial markets by the end of 2012. Due to the highly restrictive environment we refocused the strategic goals of the Moving Forward Together business plan launched in 2011.

“Let’s go beyond simply adapting, to restore sustainable competitiveness. Our new business structure enables us to take on new challenges. The business transformation has given us the opportunity to reinvent our business with projects that strengthen our foundations: innovation, customer satisfaction and operational efficiency.” Philippe Dumont, Chief Executive Officer

and also the three cornerstones of Crédit Agricole Consumer Finance’s Transformation plan in France: innovation, customer satisfaction and operational efficiency. Moving Forward Together should ensure that all projects under way in the short and medium term are consistently aimed at “sustainable competitiveness”.

This entailed a two-stage process: • Identifying eleven priority measures to develop insurance business, diversify refinancing sources and improve customer satisfaction. • Conducting a new phase of reflection on the business plan, from the end of March 2012, to take into account the new economic and financial environment

Focus on two Moving Forward Together initiatives Group customer satisfaction The aim of the customer satisfaction initiative of the Moving Forward Together business plan is to establish a standardised performance measurement system for customers and partners based on two key indicators: customer satisfaction and willingness to recommend. Surveys were conducted by the same firm for the pilot entities: Agos Ducato, Credibom, CreditPlus Bank and Crédit Agricole Consumer Finance France. The objective of the second phase is to set up a permanent system and extend it to other countries, while structuring the operating divisions so that they focus on the levers to improve quality.

Diversifying refinancing sources Diversifying refinancing sources has entailed several securitisation transactions in France and the launch of deposit collections business in Germany. It has enabled €7 billion to be raised since June 2011, including €2 billion in the fourth quarter of 2012.

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Consumer Finance has decided to reinvent its business model.

Crédit Agricole Consumer Finance has opted to rethink customer relations. Increasingly demanding, customers expect customised solutions better adapted to their ever-changing requirements. So it is now essential to focus on enhancing customer relations. A customer-centric strategy, organisation, services and procedures is key to differentiation and sustainable competitiveness. This is why Crédit Agricole

In France, the Transformation plan provides for the transition to a business focusing on customer relations, which is ready to anticipate and fulfil their expectations and requirements. To achieve this goal, Crédit Agricole Consumer Finance has founded its organisation on three guiding principles: innovation, satisfaction and operational efficiency for a sustainable relationship.

Crédit Agricole Consumer Finance’s Ambition Customer-centric strategy as a key to differentiation and sustainable competitiveness

Innovation

Customer relations

Operational efficiency

Reinventing the business model Crédit Agricole Consumer Finance Annual report 2012

Specific challenges in France – The Transformation plan

Innnovation To respond to changes in consumption patterns, Crédit Agricole Consumer Finance will innovate and offer products that are increasingly tailored to customer requirements. With innovation as the cornerstone of Crédit Agricole Consumer Finance’s growth, the company is also preparing to build sustainable competitiveness. It is required to adapt to changes in: • expectations, • customer profiles, • retail channels. Customer relations Customer confidence supports company growth. Customer satisfaction and loyalty will enable Crédit Agricole Consumer Finance to restore sustainable competitiveness. Operational efficiency The objective is to increase operational efficiency across all Crédit Agricole Consumer Finance’s businesses by streamlining and removing the inefficiencies remaining from the merger in 2010. Customers are increasingly demanding, requiring greater efficiency.

Recognising, Mobilising and Supporting Teams

Innovation

Innovating to remain one step ahead Crédit Agricole Consumer Finance has to adapt structurally in order to innovate as required. Customer expectations change, widespread use of information technology is developing fast, while new entrants are entering the market. Innovation is a key differentiator in this mature market.

How? B  y implementing innovation governance, with a dedicated budget and identified representatives within all departments, to tap into Crédit Agricole Consumer Finance’s existing innovation potential.

2013 Outlook

42

“The more we invest in customer relations at each stage of life, the more we encourage loyalty, the more we differentiate, the more we ensure sustainable business development.” Sylvie Robin-Romet, Deputy CEO, Distribution and Marketing, Sponsor of the Customer satisfaction programme

31,500 number of customers polled in the satisfaction survey in 2012 (France, Italy, Germany, Portugal)

Customer satisfaction

Counting on customer relationships Customer confidence underpins company growth. Customers are now highly demanding with volatile purchasing behaviour. We have to actively listen to customers in order to achieve high levels of satisfaction and loyalty. By investing in knowing the customer and developing a special rapport with them, Crédit Agricole Consumer Finance can better fulfill their expectations.

How? b y creating a unit responsible for measuring and monitoring customer satisfaction; by creating a Customer Relations Department to harmonise and streamline customer experience; by combining marketing forces (partners and direct sales) and creating a «service offering» entity to enhance consistency and better meet customer expectations; by redefining agency models and streamlining the network in line with customer potential; by designing an agency for the prevention of over-indebtedness to initiate, test and deploy best practice.

Measuring Customer Satisfaction in France Customer-focused strategy entails regularly measuring satisfaction. The indicator used across the whole Crédit Agricole Group is the Customer Recommendation Index. It is a performance indicator that shows the relationship between the brand and the customer, giving an overall view of the company’s market positioning, and enabling it to identify areas for improvement. Crédit Agricole Consumer Finance has also set up a tool to measure satisfaction throughout the customer experience. Called the Customer Experience index, it is common to all sales departments and involves a questionnaire for customers and a questionnaire for partners and business finders.

Operational efficiency

Improving performance Gaining efficiency to perform better when serving customers. Gaining consistently across all Crédit Agricole Consumer Finance’s business lines. Sharing best practice and improving local presence are the keys to improving operational efficiency.

How ? c reating a Corporate Center to enhance the coordination of subsidiaries, make customer satisfaction and innovation priorities at Group level, and strengthen the focus of teams in France; s pecialising the central sites in France to improve managers’ presence and share best practice; r egrouping steering and administrative activities to improve efficiency, simplify reporting procedures and enhance decision-making.

Why create a Corporate Center? Initially part of the Moving Forward Together plan, a “Corporate Center” enables centralised management and enhanced operational efficiency. The new organisation of Crédit Agricole Consumer Finance with the Corporate Center is more appropriate for managing an international Group. Its aim is to develop Group functions, while separating them from the functions dedicated to business in France, to increase the exchange of best practice with other Group entities. Finally, the «“Corporate Center” will make innovation and customer satisfaction priorities and facilitate the focus on these functions across the Crédit Agricole Consumer Finance Group.

Agricole Consumer Finance’s strategic plan as set out in the new business model. The overall plan is to reduce the number of sites from eight to four in the North and île-de-France regions. Streamlining the central sites should result in a sustainable, more flexible, efficient and consistent structure and also decrease lease expenses and strengthen operational efficiency.

Streamlining the central sites in France Announced in 2011, streamlining operations in France was one of the objectives of Crédit

Develop Group functions internationally

Coordinate the exchange of best practice

Unify innovation policy

corporate center

Centralise administrative operations

Centralise the management of Group entities

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2013 Outlook

Information System and Telephony

Business transformation  Crédit Agricole Consumer Finance is continuing to invest heavily in developing information technology, to modernise its telephone infrastructure and upgrade its information system. The new systems are fully in line with Crédit Agricole Consumer Finance’s strategy to boost innovation, customer satisfaction and operational efficiency.

“In 2012, we made key steps forward and strategic investments, particularly by integrating telephony and workstations.”  Guillaume Lesage, Deputy Chief Executive Officer, Operations, Finance and Systems

Information systems, a new step forward

integrated, state-of-the-art, telephone system by 2015.

Horus, Crédit Agricole Consumer Finance’s multi-annual plan to merge information systems, has reached a key milestone with the deployment of integrated One Horus workstations. This new customer relations interface provides staff with a more userfriendly working environment, which is more responsive and boosts sales performance.

The programme challenge is essential for enhancing the quality of customer relations and satisfaction. As a touchpoint between customers and the company, telephone services need to be effective and modern to facilitate customer relations. Until now, each business line had its own telephone system. Thanks to the AIDA programme, Crédit Agricole Consumer Finance France’s system will process customer calls nationwide. By better identifying customers and requests, the company will be able to put customers into contact with the most appropriate advisor for their requirements.

One Horus marks a significant step forward in the Horus programme. It is the first visible component of Crédit Agricole Consumer Finance’s future information system. The system provides staff a 360° view of all contracts held by customers through a single access point and password. It enables them to offer a wider panel of solutions to customer requests.

A state-of-the-art telephone service The objective of the AIDA programme to improve telephone intelligence and call distribution is to ensure excellent customer relations in branches and call centres through the deployment of an effective,

Since its launch in June 2012, several programme milestones have already been reached. A national loop connecting all Crédit Agricole Consumer Finance France’s sites now enables management of the associated sites via virtual call centres. Thus a customer’s call can be processed in the same manner from any site and can be directed to the site with the fewest calls, enabling the shortest waiting time possible for customers calling.

Credibom in Portugal revamps its customer relations management platform

“AIDA is a company-wide project to improve telephone intelligence and call distribution systems based on the three cornerstones of Crédit Agricole Consumer Finance’s strategy. It is key to customer relations and operational efficiency.” Patrice Germain, Deputy sponsor of the AIDA programme

Credibom boosted operational efficiency in 2012 through several projects. New customer relationship management software was deployed to optimise the sales process by providing sales teams with a 360° view of customers. The software also enhances marketing campaigns and enables real time monitoring of salesforce activity. The second phase of deployment, launched at the end of 2013, will make the platform accessible for after-sales services. A new telephone system set up in all Credibom call centres has improved performance and customer services and reduced communication costs. Alongside these two major investments, a new system has been deployed to manage outstanding loans, with a new collection strategy and improved document management.

45 Reinventing the business model Crédit Agricole Consumer Finance Annual report 2012

Customer promise and prevention of over-indebtedness

Reinventing the business Large-scale projects have been undertaken as part of Crédit Agricole Consumer Finance’s Transformation plan.

New customer promise in France

Prevention of overindebtedness

The purpose of the new customer promise is to better respond to customer expectations and recognise loyalty. Directly related to customer satisfaction, the customer promise is an essential means of highlighting Crédit Agricole Consumer Finance’s real commitment to meeting customer expectations. Customers primarily expect customisation, recognition of loyalty, support in difficult times, clarity and responsiveness. Consequently, seven major company-wide schemes have been implemented in all Crédit Agricole Consumer Finance France’s business lines to translate these expectations into company commitments. Medium and long-term action has already been taken to finalise the new customer promise. A major part of the fundamental change required for the customer promise will be implemented under the Transformation plan in France.

In order to contribute more actively to developing responsible credit in France, Crédit Agricole Consumer Finance has launched a programme to combat over-indebtedness, as part of the Transformation France strategic plan. The programme comprises several projects aimed at understanding and modelling customer experience: actively involving all employees in better understanding the phenomenon of over-indebtedness; improving the system and process used to deal with over-indebtedness; and finally,coordinating Crédit Agricole Consumer Finance France’s action with that of all stakeholders involved in combatting over-indebtedness.

Customer support branch in France Crédit Agricole Consumer Finance France launched the Customer Support Agency as part of its prevention of over-indebtedness programme initiated in July 2012. The objective of the new entity is to identify and support customers who are financially vulnerable. To restore their financial health, they are offered internal solutions or are redirected to a partner chosen by Crédit Agricole Consumer Finance. The agency plays an important role in Crédit Agricole Consumer Finance’s programme to prevent over-indebtedness. It deals with the issue on both an economic and social level.

Crédit Agricole Consumer Finance France joins the Crésus platform On 15 March 2012 Crédit Agricole Consumer Finance France joined the Over-indebtedness Programme set up by the Crésus federation of regional nonprofit organisations for over-indebtedness. The purpose of the public interest nonprofit organisation is to actively listen, understand and prevent the over-indebtedness of vulnerable households throughout France. A trial platform for assisting vulnerable people was launched in cooperation with eight institutions and financial organisations. When a partner financial organisation identifies a vulnerable customer, it offers help in budget management. The platform plays a dual role. First, budget assistance entails moral and psychological support, along with advice and recommendations. Then, the household is offered budget intermediation. This means assessing the household’s capacity to repay loans given their disposable income, before simulating solutions and negotiating directly with financial institutions to reschedule debt.

2013 Outlook

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Customer relations: fundamental changes  Interview WITH Sylvie Robin-Romet Deputy CEO, Distribution and Marketing France

How can we better fulfill customer expectations?

“We need to change our offering, processes and sales techniques to fulfill our commitments. These are large-scale changes.”

Fulfilling customer expectations first means identifying them, then offering more adapted solutions to more customers. It also means recognising customers’ needs and providing support at all stages in their lives, even the most difficult times, through a clear customer-focused relationship. Customers also expect accessibility, responsiveness and the recognition of loyalty.

What does this mean in practical terms for the credit business? We have to provide made-to-measure services. The objective is not to sell more to a small portion of our customers, but to sell to a greater number in a responsible, reasonable way. This means developing

new products and services, such as Sofincare or the locked revolving credit, which will be launched in 2013.

What does it mean for customers? Customers will see that we are committed, that we keep our promises, that our staff are proud of their work, that the products are adapted to their requirements and that they are recognised as people. They will enjoy the more balanced, customised relationship.

CA Consumer Finance: French public limited company (SA) with share capital of €346,546,434 – Rue du Bois Sauvage – 91038 Évry Cedex France – 542 097 522 RCS Évry. Photo credits: V. Arbelet – P. Caron – M. Danvard – T. Gasparini – A. Goulard – H-J Kamerbeek – K. Kiriaki – C. Martigny – Hell Moss – Radovan – M. Richter – P. Robin – O. Seignette – Subin – G. Tordjmann – Yu Yiming – DR CA Consumer Finance – Corbis. Thanks to: Staff of Crédit Agricole Consumer Finance. Editors: Corporate Communication (A. Barat, F. Lagier, C. Langlois), avantgarde. Design and production: avantgarde. This document has been printed on Forest Stewardship Council (FSC) paper. FSC certification guarantees that the paper is made from wood derived from forests managed according to internationally recognised environmental and social criteria and principles. It was printed using a Imprim’Vert printer, which does not use toxic products and ensures the disposal and secure storage of hazardous toxic waste.

Agos Ducato Via Bernina 7, 20158 Milano, Italy www.agosducatoweb.it

CreditPlus Bank Augustenstrasse 7, 70178 Stuttgart, Germany www.creditplus.de

FGA Capital Corso Giovanni Agnelli 200, 10135 Torino, Italy www.fgacapital.com

Credibom Av. General Norton de Matos, 71-3º, Miraflores, 1495-148 Algés, Portugal www.credibom.pt

Credium Office Park, Bucharova 2657/12, 15800 Praha 13, Czech Republic www.credium.cz

Forso Nordic Torpavallsgatan_9 Gothenburg 41673 Sweden

Credicom Consumer Finance 187, Syngrou Avenue 171 21 Nea Smyrni Athens Greece www.credicom.gr

Dan Aktiv Delta Park 46 DK-2665 Vallensbaek Strand Denmark www.danaktiv.dk

Crédit Agricole Consumer Finance France Rue du Bois Sauvage, 91038 Évry Cedex, France www.ca-consumerfinance.com

Tiilitahtaankatu 7, 04200 Kerava, Finland

Wafasalaf 72, Angle Rue Ram Allah et bd Abdelmoumen 20000 Casablanca Morocco www.wafasalaf.ma

Postboks 555 1411 Kolbotn, Norway

1012

Crédit Agricole Consumer Finance Nederland BV Entrada 600, 1096 ET Amsterdam, Netherlands www.ca-consumerfinance.nl

Finaref Nordic Box 932, 50110 Boras, Sweden

GAC Sofinco AFC 17th Floor, North Tower, Jinbin Dragon-Fly Building, 49 Huaxia Road Pearl river new town, Tianhe District, Guangzhou (510623), China

www.ca-consumerfinance.com

Rue du Bois Sauvage, 91038 Évry Cedex France

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What is the role of consumer credit in this ever-changing world? Consumer credit drives economic growth and local development. It is essential for household consumption.

How can we help customers to carry out their projects? Consumer credit enables consumers to equip and improve their home: install an integrated kitchen, change the furniture, renovate the children’s bedroom or the bathroom. Retailers that offer customers point-of-sale financing help customers to carry out their projects.

Interview WITH Christophe Gazel Managing Director of the French Furniture Market Observatory (Institut de Prospective et d’Etudes de l’Ameublement)

The importance of consumer credit in the home universe How is the furniture and home improvements industry doing? Compared with other consumer universes, the home improvements industry performed well in 2012. Buying intentions remain favourable for 2013, with 22% of French people planning to buy furniture and 31% home appliances.

How does financing help them? Credit enables consumers to opt for higher range products from general furniture retailers or to choose specialists for their living room or kitchen. 55% of people that buy an integrated kitchen seek financing. For mass retailers, offering deferred payments at no extra cost is a way of boosting sales.

How can we help customers to achieve their goals? Home improvements often involve high budgets. In times of crisis, such projects tend to be postponed. Retailers that offer customers payment facilities for changing furniture help tip the balance in favour of making a purchase.

Has e-commerce changed the way we buy? Today, 80% of internet users buy online. E-commerce has changed buying behaviour, as customers are better informed and more volatile. Retailers can build customer loyalty by offering choice in terms of product range, payment facilities and delivery options.

Interview WITH Marc Lolivier Delegate of Fevad1

E-commerce, a high growth industry What are the current e-commerce industry trends? E-commerce is performing extremely well despite the challenging economic environment. In 2012, sales were up by 19%. In 2013, revenue is expected to reach €50 billion, as the increasing offer of online services stimulates demand.

What is its impact on retailing? 32 million French consumers have adopted e-commerce and 80% of internauts shop online. The internet has also changed buying behaviour in brick-and-mortar retail stores, with customers using it to obtain product information before entering the store.

Why is consumer credit important for the e-commerce industry? Credit has always played a role in distance sales. At the outset, few credit facilities were offered by e-commerce retailers. Today, things have changed, with the main retailers offering online financing solutions.

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French federation of e-commerce and distance selling

How to prevent over-indebtedness? Over-indebtedness is not a fatality. Non-profit organisations, such as Cresus, work hand-in-hand with credit institutions to help households manage their budgets better and renegotiate their bank repayments.

Interview WITH Jean-Louis Kiehl President of the Cresus national federation

Supporting vulnerable customers and preventing over-indebtedness What is Cresus’s vocation? Cresus aims to prevent over-indebtedness due to life accidents such as unemployment, sickness or excessive debt resulting from contracting too many loans or being unaware of the associated fixed expenses.

Why has Cresus joined forces with Crédit Agricole Consumer Finance? Over-indebtedness is not a fatality. Through partnerships with financial institutions we aim to develop a model to detect over-indebtedness early, enabling vulnerable consumers to avoid the double punishment of financial and social exclusion.

How does the partnership work? Crédit Agricole Consumer Finance’s customers that have been identified as being “vulnerable” will be guided, after a preliminary interview, to our Strasbourg platform. Our volunteers will then analyse their budget and help them negotiate with their bank manager or reschedule their debt repayments.

What is the purpose of financial education? It helps households learn how to manage their budget. The Consultative Committee of the Financial Sector encourages schools, institutions and banks to participate in people’s financial education.

Interview WITH Emmanuel Constans Chairman of the Consultative Committee of the Financial sector

Financial education: learning to manage a budget What is the purpose of financial education? Financial education prepares young people and helps households to use financial and banking tools to take the right budget decisions. It is important to understand what cheques are for, what an overdraft is and whether to opt for short, medium or long-term savings.

How do you plan to develop financial education? The Consultative Committee of the Financial Sector will encourage all stakeholders, the education authorities, banks, non-profit organisations and the media to intensify and coordinate their efforts in terms of financial education. Helping households to take informed decisions will contribute to economic recovery and consumer confidence.

What role do credit institutions play in education? Providing high quality advice and information to people opening an account or taking out a loan is an essential form of financial education. It can enable customers to avoid mismanagement and financial difficulties.

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How have customer relationships changed? Customers have become more demanding. They now want fast, highquality services. The crisis has forced consumers to think carefully about what and how they buy. Internet has empowered consumers. Company strategy is now customer-centric.

Interview WITH Minter Dial Chairman of The Myndset Company1

Customer relationships have changed How can we define customer relationships today? Customer relationships are a key differentiation lever. They define a brand, making it palpable, human and tangible.

How have they changed? Today, customers demand faster and higher quality services. The crisis and the web have essentially driven this change. The crisis has forced consumers to think twice before buying. The web provides greater transparency and empowers consumers.

What are the new challenges in terms of customer relationships? Customers are more demanding than ever. They now interact with brands through multiple touchpoints (website, social networks, telephone, etc.). So companies need to provide a unique fast, integrated customer experience at all times, extending far beyond the sale of products or services. They need to be customer-centric, which means listening and coordinating more and being more responsive.

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Digital consulting firm